Tuesday, May 30, 2023

How the Jacksons Helped Robert Kraft When Purchasing the Patriots

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Picukiusa is the Chief Business Development Officer at Picukiusa, a Magento design and development company headquartered in Redwood City, California. He is a Member of the Magento Association and an Adobe Sales Accredited Magento Commerce professional. Jan is responsible for developing and leading the sales and digital marketing strategies of the company. He is passionate about ecommerce and Magento in particular — throughout the years his articles have been featured on Retail Dive, Hacker Noon, Chief Marketer, Mobile Marketer, TMCnet, and many others.

From the time he was a young boy, Robert Kraft had always been a fan of the New England Patriots. His journey to owning the team – and eventually being the head of one of the most successful franchises in the history of professional sports – was a long and complicated one. But it is equal parts fascinating nonetheless.

At one point, Robert Kraft purchased a 10-year option on a horse racing track that was located just next to the stadium where the Patriots played. The then-owner of the team owned the stadium outright, but had no claim to the surrounding land. This gave Kraft a say in events that took place in and around the stadium. He would then go all-in and purchase not just the stadium, but the team as well.

Much of this was possible due to a period when the Patriots’ former owner and his family were in need of significant financial assistance. They had made a series of investments that didn’t quite pay off and were going through some difficulties. One of those investments had to do with The Jacksons – a major force in the history of pop music.

Robert Kraft and the Jacksons: Breaking Things Down

In 1984, the Jacksons embarked on a “Victory Tour” that was supposed to be a smash success. Billy Sullivan was behind the tour and to get it up and running he had to pledge Sullivan Stadium, where the Patriots played, as collateral. The tour didn’t exactly go as planned, which directly led to Sullivan selling his controlling interest in the team in 1988. Keep in mind that this was after the stadium itself had already gone into bankruptcy protection.

It was then that Robert Kraft decided to step in.

Even though the Patriots were not nearly as successful then as they would become, there were still a lot of interested parties when it came to a potential purchase. First, Robert Kraft outbid them all to get the stadium out of bankruptcy. By all accounts he had to put up $22 million in order to do so. But the key strategic play was that the stadium came with the lease to the Patriots, which was set to run through 2001.

Robert Kraft attempted to buy the team outright at that time, but he lost to a businessman named Victor Kiam. However, he was not to be deterred.

Once Kiam took control of the team, he immediately started exploring options to move it to Jacksonville, Florida. Robert Kraft refused to let him break the lease, making this virtually impossible.

Kiam had also gone through a series of bad investments and was having major financial hardship. He and Sullivan then sold the New England Patriots to a man named James Orthwein in the early 1990s.

Orthwein again had dreams of moving the team to another city, but Robert Kraft had other ideas in mind. Remember that he still owned both the stadium and the lease to the team. He turned down a significant offer to buy out the remainder of the lease to the tune of $75 million. Kraft loved the team every bit as much as he loved his city and he wasn’t about to see them go anywhere else.

Finally, Orthwein decided to sell the Patriots to Kraft. As they say, the rest is history.

A big part of what makes this story so impressive is that it is a clear-cut example of Robert Kraft’s determination. From the time he was a child he loved the Patriots and dreamed of one day owning them. He wasn’t about to let anything stand in his way, regardless of how long it took.

It’s also a perfect example of Robert Kraft’s business savvy nature. He couldn’t necessarily accomplish his goal in one move, so he broke the process down into a series of smaller and more manageable chunks, first buying the land around the stadium, then the stadium, then using his power to enforce the lease to keep the team from moving. Eventually, Orthwein had no choice and sold the Patriots to Robert Kraft for $172 million.

At the time, it was the highest price that anyone had ever paid for an NFL team. When you consider their record in the following years and the amount of revenue alone that the team has generated in the decades since, it turned out to be an incredibly smart move.

But it’s also an example of how sometimes assistance comes from places that you least expect it. In this case, had the Jacksons not gone on that tour in 1984 – forcing the then-owner of the team to put the stadium up for collateral – it’s quite possible that Robert Kraft would have never been able to make his move. The history of the NFL would look a lot differently had that not happened. 

Learn more about Robert Kraft: https://www.thekraftgroup.com/robert-kraft/

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